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Let's start by briefly introducing the Dow Jones.
The Dow Jones Industrial Average Index (referred to as Dow Jones) is a price-weighted stock index covering 30 component stocks.Because it is price-weighted, the stock price of individual stocks determines their weight in the index, not the market cap.Here are some common high-weighted component stocks and their respective industries:
UnitedHealth Group Inc. (UNH) - Medical Care
Goldman Sachs Group Inc. (GS) - Financial
McDonald's Corp. (MCD) - Dining
Caterpillar Inc. (CAT) - Industrial Manufacturing
Boeing Co. (BA) - Aerospace and Defense
Home Depot Inc. (HD) - Retail
IBM - Technology
Other
These companies have high stock prices, hence the higher weighting, and...